Flight to Quality on Show with New Suburban Office Benchmark

One of the first major metropolitan Melbourne office buildings to be offered publicly this year has sold for $60,250,000 to Frasers Logistics & Commercial Trust after a competitive campaign.

CBRE's Capital Markets Office team of Scott Orchard and Tom Ryan negotiated the sale of 545 Blackburn Road, Mount Waverley on behalf of the building’s developers, a small syndicate which included founding members of carsales.com.

Senior Director Scott Orchard said the result and underbidder interest was testament to the overall quality of the asset, which is situated in Melbourne’s south-east near Monash University.

“The strong result sets a new benchmark for the suburban market for an existing multi-tenanted office investment. Despite the rising cost of debt there is still motivated capital that is aggressively pursuing quality investments with the right location, improvement and tenant profile story,” Mr Orchard said.

Fellow Director Tom Ryan noted, “We took an aggressive position with the asset from a price potential perspective believing that the property matched other opportunities of this quality and price point in Melbourne’s city fringe market.”

This has generated broad local, interstate and international buyer interest, Mr Ryan said, with Frasers Logistics & Commercial Trust (FLCT) securing the property after a competitive second round of offers.

Robert Wallace, Chief Executive Officer of the REIT Manager, said, “The acquisition is aligned with our strategy to pursue strategic opportunities which provides attractive yields and enables us to leverage our management expertise in Australia. With the property being 100% leased to reputable tenants in diverse industries, the Acquisition is expected to further enhance FLCT’s quality tenant mix and portfolio metrics, while providing unitholders with a stable income stream.”

The five-storey, A-Grade office building has a total net lettable area of 7,297 sqm. It is 100% leased to nine tenants with a weighted average lease expiry of approximately five years.

The CEO of the vendor syndicate Lee Mayberry commented, “It’s been a nine-year journey of planning and development to bring our vision to fruition for 545 Blackburn Road. We had long term hold intentions for the asset, which is why it was built to such a high-quality specification. Our patience enabled us to put together an equally high-quality tenancy profile, with the building attracting occupiers mostly from the local area. However, a number of factors aligned making it more suitable for a passive owner over the next period of the asset’s life.”

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